HQ 0950850 - Country of origin of bed linens; CFTA - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0950777 - HQ 0950893 > HQ 0950850

HQ 950850
April 16, 1992

CLA CO:R:C:T 950850 CAB

CATEGORY: CLASSIFICATION

Ann M. Williams
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919-9703

RE: Country of origin of bed linens; CFTA

Dear Ms. Williams:

This letter is in response to your inquiry of December 5, 1991, requesting a country of origin ruling on behalf of Lawrence Bedspread, for bed linens.

FACTS:

Woven fabric that is internally stuffed with 100% polyester, and has an outer shell of 50% cotton and 50% polyester is imported from various oriental countries to Canada for manufacturing. In Canada, the manufacturing steps include inspection, shading, cutting, assembling the shell, filling the shell, sewing, and quilting. When these processes are completed, the woven fabric is, packaged and shipped to the United States as pillow shams, comforters, and dust ruffles.

ISSUE:

I. What is the country of origin of these pillows shams, comforters, and dust ruffles?

II. Whether the merchandise in question is eligible for preferential treatment under the United States - Canada Free Trade Agreement (CFTA)?

LAW AND ANALYSIS:

I. Country of Origin

Section 12.130, Customs Regulations (19 CFR 12.130), sets forth the principles for making country of origin determinations for textile and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854) (section 204).
Pursuant to 19 CFR 12.130, the standard of substantial transformation governs the determination of the country of origin where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing.

The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d). Section 12.130(e)(1)(i)(iv) states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts into the completed article has occurred in that country.

In this instance, Canada is the country of origin for the subject merchandise. The woven fabric undergoes a substantial change in Canada. This transformation includes the fact that the woven fabric is cut, assembled, quilted, and sewn in Canada. Further,the fabric is made into new and different articles of commerce, i.e., comforters, pillows shams, and dust ruffles in Canada.

II. The United States - Canada Free Trade Agreement

General Note 3(c)(vii), HTSUSA, provides the rules which determine what products imported into the United States from Canada are entitled to special duty treatment under the CFTA. Eligible goods must be "goods originating in Canada", as stated in General Note 3(c)(vii)(A), HTSUSA.

Pursuant to General Note 3(c)(vii)(B), HTSUSA, goods imported into the Customs territory of the United States are eligible for treatment as "goods originating in the territory of Canada" only if -

(1) they are goods wholly obtained or produced in the territory of Canada and/or the United States, or

(2) they have been transformed in the territory of Canada and/or the United States, so as to be subject -

(I) to a change in tariff classification as described in the rules of subdivision (c)(vii)(R) of this note, or

(II) to such other requirements subdivision (c)(vii)(R) of this note may provide when no change in tariff classification occurs, and they meet the other conditions set out in subdivisions (c)(vii)(F)(G)(H)(I),(J), and (R) of this note.

General Note 3(c)(vii)(R)(11)(pp), HTSUSA, which determines what constitutes a change in tariff classification for goods classifiable in Chapter 63 states:

A change to any heading of Chapter 63 from any heading outside that chapter other than Headings 5106 through 5113, 5204 through 5212, 5306 through 5311, or headings of Chapters 54 and 55; provided, that goods are both cut and sewn in the territory of Canada and/or the United States.

In this instance, the woven fabric which was imported into Canada was classifiable in Chapter 55. Upon exportation to the U.S. from Canada, the pillows shams and dust ruffles are classifiable in Chapter 63 as "bed linen." Thus, this merchandise cannot be considered goods originating in Canada by having undergone a change in tariff classification, pursuant to

Another finished product that is exported to the U.S. and produced from the woven fabric is a comforter that is classifiable in Chapter 94. General Note 3(c)(vii)(R)(20)(aa), HTSUSA, which determines what constitutes a change in tariff classification for goods classifiable in Chapters 94 through 96 provides:

A change from one chapter to another, except a change to subheading 9409.90 from Headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, and 5512 through 5516.

In accordance with General Note 3(c)(vii)(R)(20)(aa), HTSUSA, since the woven fabric was initially classifiable in Chapter 55 and the finished product is classifiable in subheading 9409.90, the merchandise cannot be considered goods originating in Canada based on a change in tariff classification. As a result of the foregoing, the merchandise in question, is not eligible for preferential treatment under the CFTA.

You mention the possibility of the merchandise in question qualifying for preferential treatment under the CFTA in accordance with General Note 3(c)(vii)(R)(11)(rr), HTSUSA. However, this provision would not be applicable in this instance because the merchandise in question was not woven in Canada from yarn obtained in a third country. Instead, the fabric was imported to Canada already woven.

HOLDING:

The country of origin for the merchandise at issue is Canada. However the processing in Canada is insufficient to make the merchandise eligible for preferential tariff treatment under the CFTA.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication is accurate and complete in every material respect. Should it subsequently be determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished this may affect the determination of country of origin. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.Z, Customs Regulations (19 CFR 177.Z).

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling